We propose to develop a new type of magnetic field sensor for imaging of the magnetic fields produced by the brain and demonstrate its performance in magnetoencephalography (MEG) studies of human volunteers. The device will be based on a new laser-pumped atomic magnetometer with a world-record magnetic field sensitivity of 0.5fT/Hz^(1/2) that was recently developed by our group. MEG is a powerful brain-imaging technique that allows localization of brain areas responsible for particular types of brain activity. It has been used in diagnosis of epilepsy and brain mapping prior to surgical intervention. MEG is also used in studies of human brain organization and function. Presently all MEG measurements are performed using SQUID magnetometers with magnetic field sensitivity on the order of 5 fT/Hz^(1/2) and spatial resolution of about 2 cm. In contract to SQUID systems, the atomic magnetometer does not require cryogenic cooling and can measure independently all 3 components of the magnetic field with higher sensitivity and spatial resolution of about 2 ram. By scanning the laser beams the magnetometer can measure the magnetic field in several thousand points using only a 256 channel acquisition system. Thus, it will produce much more detailed maps of the magnetic field outside of the head and enable more accurate localization of brain activity. An MEG system based on the atomic magnetometer should also have substantially smaller cost than SQUID-based systems. It does not require a large liquid He dewar and can operate in more compact magnetic shields. In this project we will construct a magnetometer specifically optimized for MEG and develop software and methodology to utilize its unique capabilities. We will test the magnetometer on somatosensory cortex in human volunteers. We will also investigate the ability of the magnetometer to localize individual cortical modules in the brain. We expect that development of this technology will eventually lead to wide spread use of such systems in diagnostic and neuroscience applications.